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KANTAR MEDIA REPORTS FREE STANDING INSERT (FSI) COUPON USE FOR NEW CPG PRODUCT INTRODUCTIONS GREW 23% IN 2012 Return to promotion of new products through FSI coupons leads to more than 274 billion coupons being distributed last year
MINNEAPOLIS, MN January 9, 2013 Kantar Media reports that more than 274 billion Free Standing Insert (FSI) coupons were distributed in 2012 which represents a 0.8 percent increase in activity versus 2011. FSI pages increased 1.4 percent overall with the Consumer Packaged Goods (CPG) and Franchise sectors increasing 2.4 percent and 10.2 percent respectively, offsetting an 8.0 percent decline in the Direct Response sector. FSI coupon support for new products within the CPG sector increased 23.2 percent versus 2011 while retailer FSI promotion pages also increased 5.2 percent. Over the past 10 years, FSI coupon distribution has grown by 18.0 percent, reinforcing the role that FSI coupons have on delivering advertising impact , retailer alignment, and purchase incentives within an overall marketing mix, said David Hamric, General Manager, Kantar Media Marx. Manufacturers returned to promoting new products in 2012 after decreases in new product FSI coupon activity during the past few years. The number of categories participating in new product activity was up from 82 to 93 and the number of new product event dates was up 23.2 percent to 727 in 2012. The number of manufacturers utilizing this tactic increased to over 190, a 9.9 percent increase in 2012. During the challenging economic conditions experienced during the past several years, manufacturers focused more of their FSI promotion support on core brands. However, we are seeing new product innovation increasing and FSI coupon support is a proven tactic for building retail distribution, creating brand awareness, and encouraging trial purchasing for new product introductions, noted Hamric.

Retailer pages increased 5.2 percent while the number of manufacturers participating in retailer events declined from 390 to 352 in 2012. Manufacturers and retailers are participating in cooperative events to influence the shopper on their path-to-purchase. However, retailers are increasingly seeking unique or exclusive programs with manufacturers during key promotion weeks and within strategic categories to engage with their shoppers and win key shopping trips, said Hamric.

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In 2012, the frequency of FSI events increased slightly with activity occurring on 48 of 53 Sundays. The pre-Super Bowl promotion week of January 29 had the greatest activity with a weighted average circulation of 134 pages. The weeks of September 30 and the pre-Thanksgiving promotion week of November 11 were tied for the second most heavily weighted week with a total of 125 pages during each of these weeks. .
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Overall FSI Activity During 2012, more than $419 billion in consumer incentives were delivered via FSI coupons, down 0.4 percent from 2011. During the same period, more than 274 billion coupons were distributed within more than 208 billion FSI pages. FSI coupon average Face Value decreased, down 1.2 percent to $1.53. Average Expiration (Fuse) continued a steady downward trend with a decrease to 7.3 weeks, down 9.0 percent versus a year ago. These trends indicate that manufacturers are managing their financial exposure by maintaining similar levels of coupons distributed but decreasing the purchase incentive and shortening the length of time that these offers are available in the market.

2012 versus 2011 Measure 2012 Dollars Circulated $419 billion Coupons Dropped 274 billion Pages Distributed 208 billion Face Value (average) $1.53 Fuse (weeks) 7.3
Source: Kantar Media

% Change -0.4% 0.8% 1.4% -1.2% -9.0%

Sector Activity The Consumer Packaged Goods (CPG) sector remained the largest user of FSI pages with a 74.3 percent share, followed by Direct Response, which includes general advertising activity, and Franchise, comprised of restaurants, portrait studios, and other businesses. CPG pages distributed increased by 2.4 percent in 2012 after a 4.4 percent decline in 2011. Also contributing to the overall increase in Pages Circulated, Franchise posted a 10.2 percent increase versus 2011 which is the largest percentage increase for this Sector since 2005. However, Direct Response pages decreased 8.0, continuing a steady downward trend that started in 2007. 2012 Results by Sector versus 2011 Sector CPG Direct Response Franchise Total
Source: Kantar Media

Pages (MM) 154,550 31,471 22,117 208,140

% Change 2.4% -8.0% 10.2% 1.4%

Share 74.3% 15.1% 10.6% 100.0%

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Top 10 Retailers based on Pages Circulated Retailer promotion pages increased 5.2 percent and accounted for more than 17.9 billion pages in 2012. Walmart held the top spot with a 47.3 percent increase to 5.8 billion pages. Walgreens moved up to the second spot with a 42.6 percent increase to 2.4 billion pages and Target maintained the third spot with 2.3 billion pages. Family Dollar and Dollar General had the largest changes in rank within the top 10, with Family Dollar up 3 spots to 4 and Dollar General down 3 spots to 5.

Store Walmart Walgreens Target Family Dollar Dollar General CVS Pharmacy PETsMART Kroger Safeway Kmart
Source: Kantar Media

Rank 2011 1 4 3 7 2 6 5 9 12 10

Rank 2012 1 2 3 4 5 6 7 8 9 10

Top 10 Categories for New Product Activity During 2012, there were 348 new products that delivered FSI coupons across 727 event dates as part of their introduction, averaging 2.1 event dates per new product. This activity is up from 291 new products, 590 event dates, and 2.0 event dates per new product during 2011. Cereals had the greatest number of new products in 2012 with a total of 25. Snacks followed with 22 new products and Pet Food & Treats was third with 15 new products. Most New Product Introductions 2012 Rank Product Type 1 2 3 4 5 6 7 8 8 10 Cereals Snacks Pet Food & Treats Milk/Milk Products Other Packaged Goods Household Cleaning Products Alcoholic Beverages Vitamins Pet Products Yogurt

# New Products 25 22 15 14 13 12 11 10 10 9

Source: Kantar Media

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CPG Non-Food vs. Food In 2012, Non-Food categories distributed more than 171 billion coupons, up 4.2 percent versus a year ago, driven by the 12.5 percent increase within the Personal Care area. Food categories distributed more than 103 billion coupons, representing a decrease of 4.5 percent, led by the 14.1 percent decline for the Refrigerated Foods area. Six of the nine areas defined by Kantar Media reported declines or remained flat in Coupons Dropped during this period. However, three areas, including Other Packaged Goods, Personal Care and Shelf Stable Beverages, posted double digit increases in 2012. Manufacturers are decreasing the value of the offers being delivered to consumers in the Non-Food segment while remaining flat in the Food segment. Weighted Average Face Value (WAFV) for Non-Food dropped 3.1 percent to $1.84 and was combined with a 1.7 point increase in Multiple Purchase Requirements (MPR) resulting in Weighted Average Face Value Per Unit (WAFVPU) decreasing 3.8 percent to $1.59. WAFV for Food was flat, down 0.2 percent to $1.01 and was combined with a 2.6 point increase in MPR resulting in WAFVPU decreasing 3.5 percent to $0.71. These promotion tactics are designed to increase the number of products the consumer purchases per coupon to potentially increase brand loyalty or preempt competitive purchasing for a longer period of time.

Class NonFood Food Total CPG

Coupons Dropped (MM) 2012 171,301 103,653 274,731 % Chg 4.2% -4.5% 0.8%

2012 versus 2011 Avg Face Value Avg Face Value ($) Per Unit ($) 2012 $1.84 $1.01 $1.53 % Chg -3.1% -0.2% -1.2% 2012 $1.59 $0.71 $1.26 % Chg -3.8% -3.5% -2.3%

% Multiple Purchase Point 2012 Chg 18.7% 45.0% 28.6% 1.7 2.6 1.5

Avg Duration (weeks) 2012 6.7 8.3 7.3 % Chg -10.2% -6.7% -9.0%

Source: Kantar Media

Top 10 FSI Product Types in 2012 (by Coupons Dropped*) The top 10 product types based on Coupons Dropped accounted for 36.8 percent of all FSI coupon activity during 2012. Combination/Personal products (comprised of Personal Care brands which are promoted across multiple individual Personal Care categories) ranked first and increased 0.8 percent to distribute more than 13.4 billion coupons. Pet Food & Treats dropped to second place with a 10.6 percent decline to 12.4 billion coupons.

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Coupons Dropped (MM)* Rank 1 2 3 4 5 6 7 8 9 10 Product Type Combination/Personal Pet Food & Treats Household Cleaning Products Snacks Vitamins Shaving Cream/Razor Cough Cold Sinus Allergy (CCSA) Rug/Room Deodorizer Hair Care Bar/Liquid Soap 2011 13,485 13,938 10,265 11,381 10,647 7,815 7,821 9,464 6,816 6,082 2012 13,589 12,456 10,940 10,757 10,517 10,052 8,980 8,926 8,115 6,715 % Chg 0.8% -10.6% 6.6% -5.5% -1.2% 28.6% 14.8% -5.7% 19.1% 10.4% Actual Chg (MM) 104 -1,483 675 -624 -131 2,237 1,159 -538 104 -1,483

*Coupons Dropped equals the actual number of coupons distributed in FSI inserts for manufacturers brands. Source: Kantar Media

Copies of the comprehensive 10th annual FSI Distribution Trends Report will be available by request through the Kantar Media website at: www.kantarmediana.com/marx.

About Kantar Media Kantar Media provides strategic advice and competitive intelligence to the worlds leading brands, publishers, agencies and industry bodies, helping them navigate and succeed in a rapidly evolving media industry. This includes analysis of paid media opportunities; counsel on brand reputation, corporate management and consumer engagement through owned media; and, evaluating consumers reactions in earned media. Kantar Media provides clients with a broad range of insights from audience research, competitive intelligence, vital consumer behavior and digital insights, to marketing effectiveness and online influence. Our experts currently work with 22,000 companies tracking 3 million brands in 50 countries. www.KantarMediaNA.com ###